China holds up Airbus order on EU CO2 row - report

2 Min Read

FRANKFURT, June 24 (Reuters) - China is holding up a multi-billion euro aircraft order, placed with Airbus by Hong Kong Airlines, in protest at European Union plans to extend carbon dioxide emissions trading to air traffic, a German newspaper reported.

Handelsblatt said on Friday the order was initially slated to be signed on Tuesday during German-Chinese top-level government consultations in Berlin, citing industry sources.

Airbus parent EADS and Hong Kong Airlines declined to comment on the matter.

An industry source had told Reuters on Thursday that Hong Kong Airlines, which said last week it would announce orders at the Paris Air Show, placed a firm order for 10 Airbus A380 superjumbos worth $3.8 billion at list prices.

The European planemaker confirmed the deal but did not disclose who the customer was.

From January 2012, the EU will require airlines flying to Europe to be included in the emissions trading scheme (ETS), a system that forces polluters to buy permits for each tonne of carbon dioxide they emit above a certain cap.

Airlines from around the world have attacked the EU over the plan, with some warning of the danger of a trade war and airlines from poorer nations saying they would pay a high price.

Chinese airlines in May joined U.S. rivals in voicing strong opposition to their inclusion in the EU’s carbon emissions market from 2012.

Beijing’s aviation authority said the EU move will cost Chinese airlines 800 million yuan ($124 million) in the first year and more than triple that by 2020. (Reporting by Ludwig Burger; Additional reporting by Maria Sheahan and Alison Leung; Editing by Dan Lalor) ($1 = 6.467 yuan)